School board rejects bids to purchase abandoned elementary

Board and city council intend to work together to demolish building

The Southern Calhoun School District closed the Lohrville elementary building following the 2011-12 school year.

September 26, 2013

LOHRVILLE

In a joint special meeting of the Lohrville city council, the Southern Calhoun (SC) school board and the South Central Calhoun (SCC) school board, Southern Calhoun officials voted to work with the city to demolish the abandoned elementary school in Lohrville, rejecting all current bids to purchase the building. The demolition project could cost as much as $350,000.

The Southern Calhoun school board, which currently owns the building, will split the cost of the demolition bidding process with the Lohrville council. Once official bids have been received, the governing bodies will meet again to determine what portion of demolition costs each entity will pay if all agree to move forward with demolition.

This decision was supported by the SCC board, composed of members of both the Southern Calhoun and Rockwell City-Lytton districts. The two will officially consolidate on July 1, 2014. Though the SC board currently controls the fate of the Lohrville building, an agreement made without the support of the future board could be overturned once the consolidation is finished.

THE BACKGROUND

Tuesday night's special meeting in the Lohrville EMS building was the second of two held this month to specifically address the issue of the abandoned school. The first was held Sept. 18.

In a brief presentation on the financial situation of the districts, shared superintendent Jeff Kruse laid out the options available to the board: sell the property, keep the property and transfer the ownership to the SCC board next year, give the building to the city, demolish the building and deal with an empty lot, reject current bids and reopen the bidding process to try to sell the building, or try to negotiate another agreement.

The elementary building is the third closed in the two districts. Southern Calhoun closed its Lincoln Elementary building in Lake City in 2007, and RCL closed its Lytton Middle School building in 2009. Both buildings were sold, the former to Larry Waters for $22,000 and the latter to Mike Penniman for $10,000. Both buyers were from the area.

The Lohrville elementary building was closed in 2012, at which point board members stated a desire to work with the community in disposing of the building, though the council has no official vote on the issue. According to Kruse, the board's initial hope was to sell the building. The Southern Calhoun district received about $20,000 from a sale of the building's contents and is in the process of selling the bus barn for $27,900.

"It's my feeling that we've done a good job trying to communicate our intent the entire time," said Kruse.

THE POSSIBILITIES

The SC school board received two bids for the Lohrville property. Fort Dodge Youth Development offered $6,000 to convert the building and grounds into a seminary and facility for troubled youth. However, Lohrville residents expressed concerns about that bid, referencing director Eric Jones' past, which included multiple felony charges for drugs, weapons, assault and sexual assault, the latter landing him on the Iowa Sex Offender Registry.

The board also received a bid from Missouri contractor G.W. Duncan, who offered $11,100 for the building and stated his intent to resell the building to a third party that would renovate and convert the building. Residents and council members were also not satisfied with the Duncan bid, stating fears that he would not be able to sell the property, that the dilapidated structure would detract attention from the appealing parts of the community, and that the town would eventually end up fiscally responsible for tearing it down.

"The Lake City person (Waters) is local, he's come in, mowed the law, made it presentable," said council member Denise Brobst. "We can't guarantee this guy (Duncan) is even going to mow the lawn once he takes it over."

The Lohrville City Council would rather see the building demolished and the lot converted to a green space, or empty lot that could be used for future development.

Duncan, who attended the Sept. 18 meeting, said that buildings he has resold before have become preschools, libraries, gyms and community centers. In one case, he was not able to resell a building, so the district bought it back and tore it down.

"Best-case scenario, a thriving business or family of 10 moves in," said Duncan. "Worst-case scenario, it gets torn down either way."

However, councilwoman Tami Mohr and Lohrville mayor Donny Hobbs were concerned that it would be more expensive to demolish the building in the future, and that there would be fewer salvageable materials at that point to help offset the cost. The building is already leaking in several places and does not generate much property-tax revenue. Mohr also said that she found Duncan's proposal "unimpressive" and thought it wasn't likely the building would be repurposed as Lohrville already has a library, community center and emergency services building.

Council members approached Impact7G, a company recommended by the Iowa Department of Natural Resources that specializes in community redevelopment, environmental compliance, sustainability and telecommunications. According to Mohr, the company provided the city with an "opinion of probable cost" that estimated the price of demolishing the elementary building at $345,800. Asbestos abatement accounted for $85,700 of the total.

But the city does not have the money to demolish the building itself. Mohr said that the city could be eligible for up to $75,000 in competitive grant money to help with the demolition but suggested that the school board cover a majority of the demolition cost.

THE MONEY

At the Sept. 18 meeting, SC board members explained that any large expenditure now would affect the South Central Calhoun board's ability to provide for students in the future by taking away funding for the new district. In addition, the district has already set aside a portion of its future revenue to pay for a fine-arts addition at the high school, a debt the SC board disclosed to Rockwell City and Lytton residents before they voted to move forward with consolidation. Furthermore, South Central Calhoun would not be required to uphold an agreement made by Southern Calhoun.

"You can never bind a future board to a decision by a past board," said Kruse. "If we hold the building past July 1, they (SCC board members) have to take over and it becomes an asset, or a liability depending on how you look at it, of the new district."

Mohr indicated that she didn't understand how all the financial incentives received for district consolidation were already spent.

"Explain it to me," she said. "Closing the building would have been cost-savings. It seems like we could scrape up a little more money somewhere."

In the follow-up meeting Tuesday night that included members of the SCC board, Kruse explained that the districts had come together in large part for financial reasons. Both districts ran general-fund deficits in recent years. General-fund money pays for instructional costs such as salaries and textbooks.

"Closing buildings is one piece that has allowed both districts to get their houses back in financial order," he said.

Only two budget funds are eligible to use for building purposes - physical plant and equipment levy (PPEL) revenue and 1-cent sales tax revenue. These funds also cover technology and transportation needs for the district. Based on estimated costs and revenue for the 2013-14 school year, Kruse believes the SC and RCL PPEL accounts will have balances of $230,000 and $160,000, respectively, at the time of consolidation, while the 1-cent sales-tax funds have current balances of $135,000 and $700,000 for SC and RCL, respectively.

According to Kruse's figures, the new SCC district is expected to generate about $130,000 annually through PPEL funds and about $600,000 annually through 1-cent sales-tax revenue. About $230,000 of the 1-cent sales tax funds is pledged to the fine-arts addition at Lake City for the next seven years. Proposed buildings projects for the combined SCC districts include parking and roofing needs, as well as about $100,000 annually on increasing technology needs. Funds would be constricted if used for demolition, Kruse said. He suggested that the SCC board could go to the polls and request a voter levy, which could generate up to $500,000 a year for infrastructure needs for the next decade.

"I see us trying to balance academic needs, our mission statement, what's best for the school and community, as well as financial issues that will face us as a district," said Kruse.

THE DECISION

SC and SCC board president Jim Brown said that he felt it would be in the best interest of the new district to have the Lohrville issue behind it when the consolidation took place. He asked what percentage of the cost of demolition the city would be willing to share. SCC and SC board member Roscoe Simpson thought the question was unfair.

"Really it's not theirs, it's ours," he said. "Getting rid of the structure is part of having the structure."

SC and SCC board member Mark Schleisman disagreed.

"We have another option, they just don't like it," he said. "And I understand why you don't like it," he added, addressing the council members.

However, after 90 minutes of deliberation Tuesday night, the intent to demolish prevailed in a unanimous vote to reject bids.